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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
United Bancorporation of Alabama, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
United Bancorporation of Alabama, Inc. (Board of Directors)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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[ ] Fee paid previously with preliminary materials.
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UNITED BANCORPORATION OF ALABAMA, INC.
200 EAST NASHVILLE AVENUE
ATMORE, ALABAMA
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 3, 2000
NOTICE IS HEREBY GIVEN, that pursuant to call of its Board of
Directors, the Annual Meeting of Stockholders (the "Meeting") of United
Bancorporation of Alabama, Inc. (the "Corporation"), Atmore, Alabama, will be
held at the corporate offices of United Bank, 200 East Nashville Avenue, Atmore,
Alabama, on Wednesday, May 3, 2000, at 3:00 p.m., local time, for the purpose of
considering and voting upon the following matters:
1. Election of three persons as directors, each of whom is
nominated to serve until the 2003 Annual Meeting of
Stockholders and until his successor is elected and qualified.
2. Approval of the 1999 Employee Stock Purchase Plan of United
Bancorporation of Alabama, Inc.
3. Transaction of such business as may come properly before the
Meeting or any adjournments thereof.
You are cordially invited to attend the Meeting, and we hope you will
attend. WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE SIGN AND RETURN THE ENCLOSED
PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE TO ASSURE THAT YOUR SHARES ARE
REPRESENTED AT THE MEETING.
Stockholders of record on March 31, 2000 are entitled to receive notice
of and to vote at the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ H. Leon Esneul
H. Leon Esneul
Chairman of the Board
ATMORE, ALABAMA
APRIL 10, 2000
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UNITED BANCORPORATION OF ALABAMA, INC.
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
MAY 3, 2000
INTRODUCTION
This Proxy Statement is furnished to the stockholders of United
Bancorporation of Alabama, Inc. (the "Corporation") in connection with the
solicitation of proxies by the Corporation's Board of Directors for use at the
Annual Meeting of Stockholders of the Corporation to be held on May 3, 2000, at
3:00 p.m., local time, and at any adjournments thereof (the "Meeting").
The matters to be considered at the Meeting include: (1) the election
of three directors, each of whom is nominated to serve until the 2003 Annual
Meeting of Stockholders, each to serve until his successor is elected and
qualified; (2) the approval of the 1999 Employee Stock Purchase Plan of United
Bancorporation of Alabama, Inc.; and (3) the transaction of such other business
as may come properly before the Meeting.
The Corporation's executive offices are located at 200 East Nashville
Avenue, Atmore, Alabama 36502. This Proxy Statement is dated April 10, 2000,
and, together with a copy of the Corporation's 1999 Annual Report, is being
mailed to stockholders of the Corporation on or about April 10, 2000.
VOTING SECURITIES
As of March 31, 2000, the Corporation's only outstanding voting
security was its Class A Common Stock ("Class A Stock"), of which 1,090,531
shares (excluding treasury shares) were issued, outstanding, and entitled to
vote. Those shares were held by approximately 558 stockholders of record.
Stockholders of record on March 31, 2000, are entitled to receive notice of and
to vote at the Meeting.
Notwithstanding that date, the Corporation's stock transfer books will
not be closed, and stock may be transferred after the record date, although only
stockholders of record as of the record date may vote at the Meeting.
The directors, nominees for election as directors, and executive
officers of the Corporation as a group number eight persons and, as of March 31,
2000, beneficially owned 135,005 shares of Class A Stock, 12.20% of the total
shares of such stock outstanding. See "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT."
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VOTES REQUIRED
The representation in person or by proxy of at least a majority of the
outstanding Class A Stock entitled to vote at the Meeting is necessary to
constitute a quorum for the transaction of business. Votes withheld from any
nominee, abstentions and broker "non-votes" are counted as present or
represented for purposes of determining the presence or absence of a quorum for
the Meeting. A "non-vote" occurs when a nominee holding shares for a beneficial
owner does not vote on a broker or other proposal because the nominee does not
have discretionary voting power with respect to the proposal and has not
received instructions from the beneficial owner.
The election of directors requires an affirmative vote of a plurality
of the shares present in person or represented by proxy at the Meeting. The
nominees receiving the highest number of affirmative votes of such shares will
be elected as directors. Accordingly, abstentions and broker non-votes will have
no effect on the outcome of the vote for directors under Proposal 1. Proposal 2,
as well as any other matters that may be considered and acted upon by the
stockholders at the Meeting, requires approval by the affirmative vote of at
least a majority of the shares entitled to vote and represented at the Meeting
either in person or by proxy. Abstentions will be treated as votes cast with
respect to such proposals and therefore will have the same effect as a vote
against such proposals. Broker non-votes will not be counted as votes cast with
respect to such proposals and therefore will have no effect on the outcome of
the votes.
PROXIES
If the enclosed Proxy is executed and returned, it may be revoked at
any time before it has been exercised; if it is not revoked, the shares
represented thereby will be voted by the persons designated in such Proxy in
accordance with the instructions therein. IN THE ABSENCE OF INSTRUCTIONS, THE
PROXY WILL BE VOTED FOR ELECTION OF EACH OF THE DIRECTOR NOMINEES DESCRIBED IN
THIS PROXY STATEMENT, FOR PROPOSAL 2, AND WITH DISCRETIONARY AUTHORITY ON ALL
OTHER MATTERS THAT MAY COME PROPERLY BEFORE THE MEETING.
PROPOSAL 1
ELECTION OF DIRECTORS
The following table sets forth the name of each nominee and each
director of the Corporation continuing in office after the Meeting, a
description of his position and offices, if any, with the Corporation and its
subsidiaries, a brief description of his principal occupation during at least
the last five years, and certain other information, including his age. Each such
director and each nominee is a director of United Bank.
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DIRECTOR DATE TERM AS PRINCIPAL OCCUPATION
NAME AND AGE SINCE DIRECTOR EXPIRES DURING PAST FIVE YEARS
- ------------ -------- ---------------- ----------------------
L. Walter crim (54) 1997 May 2000* Owner, Central Farm Supply.
H. Leon Esneul (64) 1993 May 2000* Chairman of the Board of the
Corporation; pecan grower; managing partner
of The Doris Company Limited Partnership.
William C. Grissett (51) 1998 May 2001 Owner, Escambia Lawn &
Rental Center, Inc. since
June 1999; Vice President,
Tiger-Sunbelt Industries,
Inc. 1998-1999; President,
Sunbelt Chemicals, Inc.,
1983-1998.
Robert r. Jones,III(48) 1992 May 2002 President of the Corporation;
President and Chief
Executive Officer of United
Bank.
William J. Justice(60) 1991 May 2000* Vice Chairman of the Board
of the Corporation; Vice
Chairman of the Board of
United Bank; Pharmacist,
President and Chief
Executive Officer, Greenlawn
Pharmacy.
Bobby W. Sawyer(46) 1993 May 2002 President, Hammer, Inc.,
construction company.
David D. Swift(49) 1995 May 2001 Chairman of the Board of
Bank; Secretary, Swift Lumber,
Inc.; Secretary Swift Supply,
Inc.; Partner, Palustris
Products, Ltd.
* nominee for election for a term expiring at the 2003 Annual Meeting of
Stockholders
United Bank is a wholly-owned subsidiary of the Corporation. None of
the other entities listed under the column "Principal Occupation During Past
Five Years" above is affiliated with the Corporation.
Each director of the Corporation continuing in office after the Meeting
attended at least 75% of the meetings of the Corporation's Board of Directors
and its committees held during 1999 while he served as a director, with the
exception of William J. Justice who attended 71% of the meetings. The
Corporation's Board of Directors held seven meetings in 1999.
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The Corporation's Board of Directors does not have standing audit,
nominating, or compensation committees, or committees performing similar
functions. However, the Corporation's Bylaws do authorize the Board of Directors
to designate such committees. In addition, the Board of Directors of the Bank
has established audit and compensation committees. In connection with the
adoption of the United Bancorporation of Alabama, Inc. 1998 Stock Option Plan
(the " Stock Option Plan"), the Board designated Messrs. Esneul, Justice, Sawyer
and Swift to serve on the Stock Option Administration Committee of the Board,
which committee acts as the Administrator of the Stock Option Plan. This
committee has also been designated as the Administrator of the 1999 Employee
Stock Purchase Plan of United Bancorporation of Alabama, Inc. (See Proposal 2).
It is intended that, unless "Withhold Authority" is noted, proxies in
the accompanying form will be voted at the Meeting for the election to the Board
of Directors of L. Walter Crim, H. Leon Esneul, and William J. Justice to serve
until the 2003 Annual Meeting of Stockholders and until their respective
successors are elected and qualified. All three nominees presently are members
of the Board of Directors. If any nominee is not a candidate when the election
occurs (which is not anticipated to be the case), it is intended that the
proxies may be voted, unless authorization is withheld, for any substitute
nominee or nominees recommended by the Board of Directors. The Board of
Directors has no reason to believe that any nominee will be unable to serve as a
director if elected.
No fees are paid to directors of the Corporation for their services as
such. Since all of the Corporation's directors also serve as directors of United
Bank, they are primarily compensated for their services to United Bank. See
"Executive Compensation" below for information regarding compensation paid to
executive officers of the Corporation.
During 1999 all current directors of the Corporation also served as
directors of United Bank. Each director of United Bank received a standard fee
for such service of $3,500 ($4,700 for United Bank Board Chairman David D.
Swift); $100 for each Joint Loan Committee meeting attended; and $50 for each
additional committee meeting attended, with a maximum of $50 per day for
additional meetings. In 1999, United Bank's Board of Directors held a total of
12 meetings.
In connection with the Corporation's adoption of the Stock Option Plan
in 1998, each director of the Corporation was granted nonstatutory stock options
to purchase 2,000 shares of Class A Stock at an exercise price of $16 per share
(the number of shares and exercise price having been adjusted in accordance with
the Stock Option Plan to account for the 2-for-1 split of Class A Stock in May,
1999), with two-fifths of such options being immediately exercisable and
additional one-fifth increments becoming exercisable in December of 1999 through
2001, respectively. Although no additional grants have been made at this time,
it is the intent of the Board that each Corporation director will be granted
options to purchase an additional 1,000 shares of Class A Stock at the
then-current market value following election or reelection for a three-year term
to the Board of Directors of the Corporation, such options to vest in one-fifth
increments.
THE BOARD OF DIRECTORS OF THE CORPORATION RECOMMENDS
A VOTE "FOR" ELECTION OF THE NOMINEES LISTED ABOVE.
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EXECUTIVE OFFICERS
The following table lists the executive officers of the Corporation and
the respective positions held by them in the Corporation. Each is a director of
the Corporation, except for Mitchell D. Staples, and information regarding their
other business experience during the past five years and certain other
information is set forth under the caption "ELECTION OF DIRECTORS" above. Mr.
Staples, age 38, has been the Controller and Cashier, and now Chief Financial
Officer, of United Bank from October 1992 to present.
NAME POSITION
---- --------
Robert R. Jones, III President
H. Leon Esneul Chairman of the Board
William J. Justice Vice Chairman of the Board
David D. Swift Secretary
Mitchell D. Staples Treasurer
The executive officers of the Corporation are elected annually at the
organizational meeting of the Board of Directors, which follows the annual
meeting of stockholders, to serve until the organizational meeting in the
subsequent year. Except as described under Agreements with Mr. Jones below,
there are no known arrangements or understandings between any executive officers
and any other person pursuant to which any of the above-named persons was
selected as an officer.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The table below sets forth, as of March 31, 2000, the number of shares
of the Corporation's Class A Stock held by each person who owns of record or, to
the knowledge of the Corporation, may be deemed to own beneficially, more than
5% of the outstanding shares of such Stock.
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
------------------- -------------------- --------
Kent D. Sherrill 54,866(1) 5.03%
7861 Arthur Brown Road
Walnut Hill, FL 32568
- --------------------
(1) Includes 800 shares owned by his wife; 4,572 shares owned jointly by his
wife and their children; 34,930 shares owned by other family members over which
Mr. Sherrill has voting and dispositive power; and 2,800 shares managed by a
trust for himself and other family members over which Mr. Sherrill has voting
and dispositive power.
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The table below sets forth, as of March 31, 2000, the number of shares of Class
A Stock beneficially owned by each director and by all executive officers and
directors as a group.
PERCENTAGE
AMOUNT AND NATURE OF OF OUTSTANDING
NAME BENEFICIAL OWNERSHIP CLASS A STOCK
---- -------------------- -------------
L. Walter Crim 4,158(1) *
H. Leon Esneul 50,428(2) 4.62%
William C. Grissett 18,690(3) 1.71%
Robert R. Jones, III 21,888(4) 1.98%
William J. Justice 12,844(5) 1.18%
Bobby W. Sawyer 9,401(6) *
David D. Swift 17,576(7) 1.61%
All executive officers 135,005(1)(2)(3)(4) 12.20%
and directors as a (5)(6)(7)(8)
group (8 persons)
- ---------------------
* less than 1%
(1) Includes 636 shares owned jointly with his children; and 400 shares which
may be acquired within 60 days upon exercise of options.
(2) Includes 36,709 shares owned by The Doris Company Limited Partnership and
12,000 shares owned by his father over which Mr. Esneul has voting and
disposition power.
(3) Includes 6,490 shares owned jointly with his wife; 11,800 shares owned by
United Bank in his Individual Retirement Account; and 400 shares which may be
acquired within 60 days upon exercise of options.
(4) Includes 4,140 shares owned jointly with his wife; 140 shares owned jointly
with his son; 1,658 shares owned by United Bank in his Individual Retirement
Account; 1,122 shares owned by United Bank in an Individual Retirement Account
for his wife; 140 shares owned jointly by his wife and his daughter; and 14,688
shares which may be acquired within 60 days upon exercise of options; does not
include 68 shares subscribed for under the ESPP subject to stockholder approval
of Proposal 2.
(5) Includes 7,100 shares owned jointly with his wife; 2,196 shares owned by his
wife, as to which shares Mr. Justice disclaims beneficial ownership; 216 shares
owned by Mr. Justice for his granddaughter, as to which shares Mr. Justice
disclaims beneficial ownership; and 400 shares which may be acquired within 60
days upon exercise of options.
(6) Includes 8,717 shares owned jointly with his wife; 284 shares owned jointly
by his wife and his children, as to which shares Mr. Sawyer disclaims beneficial
ownership; and 400 shares which may be acquired within 60 days upon exercise of
options.
(7) Includes 3,376 shares owned by his wife, as to which shares Mr. Swift
disclaims beneficial ownership.
(8) Does not include 136 shares subscribed for under the ESPP subject to
stockholder approval of Proposal 2.
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EXECUTIVE COMPENSATION
Officers of the Corporation, and directors who also serve as directors
or officers of United Bank, are remunerated by United Bank. The following
Summary Compensation Table sets forth certain information concerning
compensation to Robert R. Jones, III, the only executive officer of the
Corporation who received total annual salary and bonus for 1999 exceeding
$100,000.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------- ----------------------------
ALL
SECURITIES OTHER
SALARY BONUS UNDERLYING COMPEN-
NAME AND PRINCIPAL POSITION YEAR ($) ($) OPTIONS (#) SATION ($)
- --------------------------- ---- ------- ------- ----------- ----------
Robert R. Jones, III 1999 142,500 58,781 4,080 20,426(1)
President of the Corporation 1998 138,000 42,152 12,240 20,823(1)
President of the Bank 1997 118,500 20,202 19,749(1)
(1) Includes $7,638 contributed on behalf of Mr. Jones as a supplemental
benefit pursuant to an Executive Compensation Agreement in each of
1999, 1998 and 1997; $456 premium reimbursed by United Bank on a
long-term disability insurance policy for Mr. Jones in each of 1999,
1998 and 1997; $1,000, $1,000 and $958 contributed by United Bank for
the account of Mr. Jones pursuant to United Bank's 401(k) Employee
Incentive Savings Plan (the "401(k) Plan") in 1999, 1998 and 1997,
respectively; $5,550, $5,950 and $5,500 in fees for attendance at
meetings of United Bank's Board of Directors in 1999, 1998 and 1997,
respectively; and $5,782, $5,779 and $5,197 in profit-sharing payments
made in 1999, 1998 and 1997 for services in 1998, 1997 and 1996.
Agreements with Mr. Jones. Following discussions in the latter part of 1997, the
Bank entered into an Employee Agreement with Mr. Jones dated as of January 1,
1998 (the "Agreement"). Pursuant to the Agreement, Mr. Jones has agreed to
provide full-time professional services to the Bank in the capacity of President
and CEO of the Bank, to the exclusion of other businesses or activities. The
Agreement is for an initial term from January 1, 1998 through December 31, 2001,
and unless terminated will automatically renew on January 1 of each year for a
three-year term. The Agreement provides for a specified annual salary, together
with performance-based cash incentive compensation ("Bonus") determined by the
Board of the Bank at the time of its annual review of Mr. Jones' performance.
The Bonus under the Agreement is calculated as a percentage of Mr. Jones'
salary, ranging from zero to 45%, based on attainment of certain net income
levels by the Bank. Salary and Bonus paid to Mr. Jones for 1999 are reflected in
the Summary Compensation Table above. The Agreement specifies that Bonus awards
are intended to eventually be governed by an Executive Incentive Compensation
Plan applicable to certain officers of the Bank generally, as well as to the
President and CEO of the Bank. The Agreement also provides for Mr. Jones to
receive long-term incentive at the discretion of the Board; benefits provided to
employees of the Bank generally; supplemental retirement benefits already agreed
upon by the Bank and Mr. Jones; reimbursement of reasonable and customary
business expenses incurred by him in connection with the performance of his
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duties; payment or reimbursement of certain fees for professional and other
organizations in the Bank's market area; an automobile allowance; and vacation
time.
The Agreement also provides generally that, in the event of Mr. Jones'
death, the Bank will pay to his estate one quarter of his then-current annual
salary plus a prorata portion of the Bonus otherwise payable to him; that, in
the event of his disability, the Bank will pay his salary and a prorata portion
of Bonus until the earlier of twelve months after the date of disability or such
time as disability benefits commence under a Bank-provided disability insurance
policy; and that the Bank will pay Mr. Jones an amount equal to monthly salary,
benefits and prorata Bonus for twelve months after termination of his employment
if such termination is not for cause or a result of material change in Mr.
Jones' duties and responsibilities.
Under the Agreement, Mr. Jones has agreed that, during the term of his
employment and for two years thereafter, he will not engage in any business
similar of that of the Bank or any of its affiliates or solicit any employee of
the Bank or any of its affiliates to leave their employment with the Bank (the
"Noncompetition Agreements"). The Agreement also provides generally that, if a
change of control of the Bank occurs and within 36 months thereafter his
employment by the Bank is terminated, the Bank will pay him a severance payment
equal to two times the greater of the total cash compensation paid to him for
the fiscal year most recently completed before the termination or his annual
salary at the time of termination, and that, in such event, the Noncompetition
Agreements would no longer apply.
In a Supplemental Agreement with Mr. Jones dated as of March 9, 1999
(the "Supplemental Agreement"), the Corporation and the Bank have also agreed
that, subject to his continued employment by the Bank at such times, in each
year beginning in 1999 and ending in 2002, the Corporation will grant an
incentive stock option covering 4,080 shares of stock (the number of shares
having been adjusted to account for the 2-for-1 split of Class A Stock in May,
1999) to Mr. Jones, exercisable at the then-current fair market value of Class A
Stock, with each such ISO being exercisable in five equal installments, the
first of which will be vested on the date of the grant. The Supplemental
Agreement specifies that the incentive stock options provided for thereunder
will be granted immediately in the event of a Change of Control as defined in
the Employment Agreement. The grant of options pursuant to the Supplemental
Agreement in 1999 is reflected under "OPTION GRANTS IN LAST FISCAL YEAR" below.
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BOARD REPORT ON EXECUTIVE COMPENSATION
The Board of Directors of the Corporation has not appointed a separate
committee for determination of executive compensation generally. The Stock
Option Administration Committee of the Corporation's Board of Directors has been
appointed as administrator of the Stock Option Plan and the Employee Stock
Purchase Plan.
Each non-director executive officer of the Corporation is also an
officer of the Bank, and receives compensation for services to the Bank.
Executive compensation decisions made by the Bank are reviewed by the entire
Board, with the exception of determinations made with respect to Mr. Jones, in
which he does not participate.
The Board of Directors of the Bank makes compensation determinations
with respect to the employees of the Bank, including those who are executive
officers of the Corporation, based on the recommendations of the Compensation
Committee of the Bank's Board of Directors (the "Compensation Committee"). For
executives other than Chief Executive Officer, the Compensation Committee acts
on compensation recommendations made by the Chief Executive Officer, with the
objective of providing compensation competitive with that provided by comparable
financial institutions.
The Compensation Committee is continuing the process of evaluating an
executive incentive compensation plan to be applicable to certain executives
generally, as well as to the Chief Executive Officer of the Bank. It is
anticipated that, eventually, compensation designed to attract and retain key
executive officers will consist of a base salary level together with annual and
long-term incentive compensation. At present, compensation for executive
officers other than the Chief Executive Officer consists of annual base salary
and annual cash bonuses determined by the Compensation Committee, primarily on
the recommendation of the Chief Executive Officer. Base salary is determined at
hiring and is reviewed annually for increases based upon performance evaluations
made by the Chief Executive Officer. Annual cash bonuses are generally awarded
as a percentage of base salary. The bonus is based on the individual's
compensation, salary grade and individual performance and the performance of the
Bank.
The compensation of the Chief Executive Officer, Mr. Jones, is
determined by the Compensation Committee in accordance with the provision of Mr.
Jones' employment agreement. See Agreements with Mr. Jones above. Mr. Jones'
compensation consists of a specified annual salary, performance-based annual
cash incentive compensation, long-term incentives in the form of stock options,
and other benefits. The Committee based its determination of Mr. Jones'
compensation package as reflected in the Agreement on the advice and
recommendation of a compensation consultant specializing in the banking
industry, with the intent of providing a compensation package designed to retain
Mr. Jones' services and motivate him to perform to the best of his abilities.
The increase in Mr. Jones' 1999 base salary reflects the Board's determination
of the salary level necessary to meet this objective. The Bonus paid to Mr.
Jones for 1999, approximately 41% of his 1999 salary, was based on attainment of
predetermined net income levels by the Bank. Under the Agreement, depending on
the level of net income of the Bank, the bonus could have ranged from zero to
45%. As described above, long-term incentives in the form of incentive stock
options granted to Mr. Jones in 1999 were granted in accordance with the
Agreement as supplemented in 1999.
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This report is submitted by L. Walter Crim, H. Leon Esneul, William C.
Grissett, Robert R. Jones, III, William J. Justice, Bobby W. Sawyer, and David
D. Swift, being all of the members of the Board of Directors during the 1999
fiscal year.
OPTIONS GRANTS IN LAST FISCAL YEAR
The following table and notes provide information on option grants made
in 1999 under the Stock Option Plan to Mr. Jones, the only executive officer
named in the Summary Compensation Table above.
Individual Grants Grant Date Value(1)
------------------------------------------------------------- -------------------
% of Total
Number of Options
Securities Granted to
Underlying Employees in Exercise or Grant Date
Options Fiscal Base Price Per Expiration Present
Name Granted Year(2) Share Date Value
- ---- ----------- --------------- -------------- ----------- -------------------
Robert R. Jones, III 4,080(2) 100% $25.74 12/22/2009 $45,850.02
(1) The Corporation has used the Black-Scholes Option Valuation model
adjusted for dividends to determine grant date present value of the
options. The Corporation does not advocate or necessarily agree that
the Black-Scholes model properly reflects the value of an option. The
assumptions used in calculating the option value are as follows: a
risk-free interest rate of 6.49%, the rate applicable to a ten-year
treasury security at the time of the award; a dividend yield of 1.83%,
the yield at the time the option award was made; volatility of 12%,
calculated using daily stock returns for the twelve month period
preceding the option award; a stock price at date of grant of $25.74;
and a ten-year stock option term. No adjustments were made for
forfeitures or vesting restrictions on exercise.
(2) Options were granted with an exercise price equal to market value on
the date of the grant and are exercisable in an initial 20% increment
at the date of grant and in cumulative 20% increments at the end of
each of the four years following the date of grant, subject to the
condition that no option may be exercised later than ten years after
the date of the grant.
The following table and notes provide information on the value at
December 31, 1999 of unexercised options held by Mr. Jones, the only executive
officer named in the Summary Compensation Table above.
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AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR(1)
AND 1999 FISCAL YEAR-END OPTION VALUES
Number of Securities Value of Unexercised in-the-
Underlying Unexercised Money Options at 12/31/99($)(2)
Options at 12/31/99 ---------------------------------
----------------------------------
Name and Position Exercisable Unexercisable Exercisable Unexercisable
----------------- ----------- ------------- ----------- -------------
Robert R. Jones, III 14,688 13,872 $157,700 $118,761
(1) No options were exercised by Mr. Jones during the 1999 fiscal year.
(2) The ultimate realization of value on the exercise of such options is
dependent upon the market price of Common Stock at the time of
exercise. Calculations are based on the $28.00 price of the last sale
of Class A Stock reported to the Corporation during the fiscal year.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The SEC requires certain information to be provided under the foregoing
caption. As reported above, the Board of Directors has no compensation
committee. Each member of the Board of Directors is a member of the board of
directors of the Bank, and these directors of the Corporation, Messrs. Grissett,
Justice and Sawyer, are members of the Compensation Committee of the board of
directors of the Bank. The Board of Directors of the Corporation includes
Messrs. Jones, Esneul, Justice and Swift, each of whom may be deemed to be an
executive officer of the Corporation. None of Messrs. Esneul, Justice and Swift
receives compensation from the Corporation for services as an officer of the
Corporation, and Mr. Jones does not participate in the Board's deliberations
with respect to his compensation.
REPORTS UNDER SECTION 16 OF THE SECURITIES AND EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 ("Exchange Act")
requires the Corporation's executive officers and directors, and any persons who
own more than 10% of the Class A Stock, to file reports of ownership and changes
in ownership with the Securities and Exchange Commission ("SEC"). The
Corporation believes that all requirements under Section 16(a) of the Exchange
Act applicable to directors and executive officers of the Corporation were
complied with by such persons during the last fiscal year, except for a late
report by Mr. Swift of a purchase by his spouse, and a late report by Mr. Esneul
of shares owned by his father for whom Mr. Esneul acts under a power of
attorney. In making this disclosure, the Corporation has relied on written
representations by or on behalf of its directors and executive officers and
copies of reports filed.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Some Corporation and United Bank directors, officers, and principal
stockholders, and their associates and immediate families were customers of, or
had transactions with, subsidiaries of the Corporation in the ordinary course of
business during 1999. In addition, some Corporation and United Bank directors
are directors, officers, trustees, or principal security holders of corporations
or other organizations that were customers of, or had transactions with, the
Corporation or its subsidiaries in the ordinary course of business during 1999.
All outstanding loans and other transactions with the Corporation's, and its
subsidiary's, directors, officers, and principal stockholders, and their
associates and immediate families, were made in the ordinary course of business
on substantially the same terms, including interest rates and collateral, as
those prevailing at the time for comparable transactions with other persons, and
when made did not involve more than the normal risk of collectibility or present
other unfavorable features. In addition to banking and financial transactions,
the Corporation and its subsidiaries may have had additional transactions with,
or may have used products or services of, various organizations of which
directors of the Corporation or its subsidiaries are directors, officers, or
principal stockholders. Except as described below, such transactions were on
terms comparable to those which would have been recorded with unaffiliated
parties, and the amounts involved in such noncredit transactions have in no case
been material in relation to the business of the Corporation and its
subsidiaries or to such other organizations.
The Corporation has entered into a Real Estate Option
Agreement (the "Option Agreement") with Juniper Development, LLC ("Juniper"), an
Alabama limited liability company owned by the directors of the Corporation and
of the Bank. Juniper owns a 22-acre parcel of land located on County Road 20 in
Foley, Alabama. Under the Option Agreement, the Corporation has the right to
select up to 3 acres of its choice from the 22-acre parcel, to be used for a
Foley branch of the Bank (the "Bank Site"). If the Corporation exercises the
option to purchase the Bank Site, the purchase price under the Option Agreement
would be the lesser of 85% of the appraised value of the Bank Site selected by
the Corporation, or $400,000 (the "Maximum Price"). The Corporation had
previously investigated and offered to purchase another property suitable for
use for a Foley Bank branch, and was unable to purchase such property for an
amount equal to the Maximum Price set in the Option Agreement. Based on the
prior efforts to purchase a suitable property, the Corporation anticipates that
its cost to acquire a Foley branch site under the Option Agreement would be
lower than would be paid for a comparable alternate site in a transaction with
unaffiliated third parties.
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COMPARATIVE PERFORMANCE GRAPH
The Securities and Exchange Commission ("SEC") requires the Corporation
to include in this Proxy Statement a graph which compares the yearly percentage
change in cumulative total shareholder return on the Class A Stock with (i) the
performance of a broad equity market indicator, and (ii) the performance of a
published industry index or peer group. Set forth below is a graph comparing the
yearly percentage change in the cumulative total stockholder return on the Class
A Stock against the cumulative total return of the S&P 500 Index and the Nasdaq
Bank Index for the five-year period from December 31, 1994 to December 31, 1999.
The Nasdaq Bank Index is a broad-based capitalization-weighted index of domestic
and foreign common stocks of banks that are traded on the Nasdaq National Market
System (Nasdaq/NMS) as well as the SmallCap Market. The Class A Stock is not
traded on a recognized market, and the price for the Class A Stock on the dates
represented in the graph are based on the most recent sales prices reported to
the Corporation on or prior to each such date.
Period Ending
-------------------------------------------------------------------------------
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
United Bancorporation of 100.00 113.89 159.44 219.09 280.55 371.95
Alabama, Inc. ------ ------ ------ ------ ------
S&P 500 100.00 137.70 162.67 193.78 222.59 242.98
------ ------ ------ ------ ------
Nasdaq Bank Index 100.00 148.00 176.50 242.73 231.73 226.46
------ ------ ------ ------ ------
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PROPOSAL 2
PROPOSAL TO APPROVE THE 1999 EMPLOYEE STOCK PURCHASE PLAN OF UNITED
BANCORPORATION OF ALABAMA, INC.
General. In order to be able to continue to attract, retain and
motivate employees by providing them with an opportunity to acquire an interest
in the economic progress of the Corporation and in order to provide employees
with a further incentive to promote the Corporation's best interests, the Board
of Directors adopted the 1999 Employee Stock Purchase Plan of United
Bancorporation of Alabama, Inc. (the "ESPP") on November 9, 1999. A copy of the
ESPP is attached hereto as Appendix A. The statements made in this Proxy
Statement with respect to the ESPP are qualified by and subject to the more
complete information set forth therein.
The effective date of the ESPP was November 9, 1999, subject to the
approval of the ESPP by the Corporation's stockholders at the Meeting. The ESPP
may be terminated by the Board of Directors of the Corporation at any time.
The Corporation has reserved for issuance under the ESPP 35,000 shares
of the Corporation's Class A Stock. Such shares may be either authorized but
unissued shares or shares re-acquired by the Corporation. The number of shares
available under the ESPP is subject to adjustment in the event of any stock
dividend, recapitalization, reorganization, merger, consolidation, split-up,
combination or exchange of shares, or rights offering to purchase the Class A
Stock at a price substantially below fair market value, or any similar change
affecting the Class A Stock.
Employees of the Corporation and its subsidiaries, including the Bank,
are eligible to participate in the ESPP. For an employee to be eligible to
participate in the ESPP, the employee's customary employment must be for more
than twenty (20) hours per week and for more than five months in any calendar
year. Directors of the Corporation who are not also employees are excluded from
participating in the ESPP. Also excluded from participating are employees who
own five percent of the outstanding stock of the Corporation. No employee shall
have rights to purchase Class A Stock under the ESPP and similar employee stock
purchase plans of the Corporation accruing at a rate which exceeds $25,000 of
fair market value of such stock (determined at the time such stock purchase
right is granted) for each calendar year in which such stock purchase right is
outstanding at any time. During the initial offering period under the ESPP in
February, 2000, approximately 72 employees were eligible to purchase an
aggregate of up to 1,603 shares of Class A Stock under the ESPP.
The ESPP provides that stock purchase rights shall be granted from time
to time at the discretion of the Board of Directors (the "Board") or a committee
of two or more persons who are non-employee directors of the Corporation
designated by the Board to administer the ESPP (the "Committee"). The Board has
designated the Stock Option Administration Committee of the Board as the
Committee administering the ESPP. The number of shares that may be purchased by
any employee under an offering, which shall be not less than five shares, nor
more than such number of whole shares as may be purchased at the price specified
by the Committee for such offering for the lesser of (a) $1,500 or (b) an amount
equal to
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five percent (5%) of the annual basic or regular compensation of such employee
in effect at the commencement of the period for such offering, excluding
overtime, bonuses, incentive compensation and contributions made to any employee
benefit plan maintained by the Corporation or any affiliate of the Corporation.
The shares will be purchased at a price not lower than 85% of the fair market
value of the shares on the first day of the offer period. Shares purchased under
the ESPP shall be issued as soon as is practicable after the full payment in
cash of the purchase price for shares subscribed for during the offer period.
The purchase price for shares purchased under the ESPP must be paid on
the payment date specified by the Corporation. The purchase price will be
deducted from the subscribing employee's United Bank account if the purchase
price is not paid by the end of five (5) banking days after the payment date.
The proceeds received by the Corporation from the sale of Class A Stock under
the ESPP will be used for general corporate purposes.
Nothing in the ESPP confers upon any employee any right to continue in
the employ of the Corporation or to interfere in any way with the right of the
Corporation to terminate the employment of any person at any time.
It is the hope of the Corporation that Class A Stock purchased under
the ESPP will be held for investment and not for resale; in furtherance thereof,
the Corporation may impose such limitations on the sale or other disposition of
such Class A Stock as it deems appropriate. Nothing contained in the ESPP shall
restrict any employee from selling any Class A Stock purchased under the ESPP at
any time they choose provided any such sale is consistent with any limitations
imposed pursuant to the preceding sentence. Each employee shall assume the risk
of any market fluctuations in the price of Class A Stock purchased by such
employee under the Plan.
Upon the termination of employment for any reason of an employee who
has purchased shares of Class A Stock pursuant to the ESPP, whether by the
Corporation, with or without cause, or by the employee, the Corporation may
elect, but is not obligated to, repurchase all or any of such shares. If the
Corporation exercises its right to make such a repurchase, the Corporation shall
within 30 days following such termination notify the former employee in writing
of the number of shares to be purchased and the price per share, and shall
repurchase the shares for cash within ninety (90) days after the date of the
notice. The repurchase price for shares so repurchased shall be the fair market
value of the shares as of the date of termination, as determined by the
Committee.
To date, no shares have been issued under the ESPP. However, during the
February 1 through February 15, 2000 initial offering period under the ESPP, the
Corporation received subscriptions from 30 employees for the purchase of an
aggregate of 901 shares of Class A Stock at a price of $21.88 per share. Of such
shares, Messrs. Jones and Staples subscribed for 68 shares each and 535 were
subscribed for by other officers. The issuance of shares pursuant to such
subscriptions is subject to satisfaction of certain conditions, including
stockholder approval of the ESPP.
Federal Tax Income Tax Consequences. The following is a summary of the
principal federal income tax consequences associated with the stock purchase
rights granted under the ESPP. It does not
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describe all federal tax consequences under the ESPP nor does it describe
foreign, state or local tax consequences.
The ESPP is intended to qualify as an "employee stock purchase plan"
within the meaning of Section 423 of the Internal Revenue Code of 1986. The
Company believes that the ESPP is not subject to any of the provisions of the
Employee Retirement Income Security Act of 1974.
An employee will not recognize taxable income at the time the employee
purchases shares under the ESPP, even though the employee pays less than market
price for the shares. If an employee disposes of the shares, the amount of
ordinary income, capital gain or capital loss realized will depend on whether
the disposition constitutes a qualifying or a disqualifying disposition. A
disposition of shares purchased under the ESPP will be a qualifying disposition
if it does not occur (1) within two years after the granting of the stock
purchase right, or (2) within one year after the shares have been transferred to
the employee. A disposition which does not meet such requirements will be a
disqualifying disposition. If an employee disposes of shares purchased under the
ESPP in a qualifying disposition, the employee will recognize as ordinary income
in the year of the disposition an amount equal to the lesser of (1) the excess
of the fair market price of the shares at the time the option was granted over
the option price, or (2) the excess of the fair market price of the shares at
the time of the disposition over the option price. Any further gain realized on
a taxable disposition (e.g., a sale) will generally be taxed as long-term
capital gain in the year of the disposition. If any employee disposes of shares
in a qualifying disposition (e.g., a sale to an unrelated party) that is at a
price less than the option price the employee will normally recognize a
long-term capital loss equal to the excess of the option price over the sales
price.
If an employee makes a disqualifying disposition of shares purchased
under the ESPP, the employee recognizes as ordinary income in the year of the
disposition an amount equal to the difference between the option price and the
fair market price of shares on the date on which the option is exercised.
Generally, the Corporation will not be entitled to any income tax deduction when
an employee exercises an option to purchase shares under the ESPP or when an
employee subsequently disposes of such shares. However, if the subsequent
disposition is a disqualifying disposition, the Corporation will be entitled to
an income tax deduction in an amount equal to the amount of ordinary income
realized by the employee as the result of any such disposition.
Additional information relating to the ESPP may be obtained from the
Corporation at 200 E. Nashville Ave., Atmore, Alabama 36502, (334) 368-2525.
THE BOARD OF DIRECTORS OF THE CORPORATION RECOMMENDS
A VOTE "FOR" PROPOSAL 2.
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AUDITORS
KPMG Peat Marwick or its predecessor, Peat Marwick Main & Co.
(collectively, "Peat Marwick"), independent certified public accountants, was
selected as the Corporation's auditor on September 26, 1984, and has served as
such since then. A representative of Peat Marwick is expected to be present at
the Meeting and will have the opportunity to make a statement if he so desires.
The Peat Marwick representative also is expected to be available to respond to
appropriate questions.
OTHER BUSINESS
Management currently knows of no other business to be brought before
the Meeting. If other business is brought properly before the Meeting, the
accompanying Proxy will be voted in the discretion of the persons designated in
such Proxy, unless the "Authority Withheld" box has been checked.
EXPENSES OF SOLICITATION
The cost of soliciting proxies in the accompanying form will be borne
by the Corporation. In addition to the use of the mails, proxies may be
solicited by directors, officers, or other employees of the Corporation or its
subsidiaries personally, by telephone, or by telefacsimile. The Corporation does
not expect to pay any compensation for the solicitation of proxies, but will
reimburse brokers, custodians, or other persons holding stock in their names or
in the names of nominees, for their reasonable expenses in sending proxy
materials to principals and obtaining their instructions.
STOCKHOLDER PROPOSALS
Stockholders are entitled to submit proposals on matters appropriate
for stockholder action consistent with regulations of the Securities and
Exchange Commission ("SEC"). In order to be included in the Corporation's proxy
statement and form of proxy relating to its 2001 Annual Meeting pursuant to Rule
14a-8 promulgated by the SEC ("Rule 14a-8"), proposals from stockholders to be
presented at the 2001 Annual Meeting must be received by the Secretary of the
Corporation no later than August 18, 2000. The date after which notice of a
shareholder proposal submitted outside of the processes of Rule 14a-8 will be
considered untimely is March 19, 2001. If notice of such a shareholder proposal
is received by the Corporation after March 19, 2001, then the Corporation's
proxy for the 2001 Annual Meeting may confer discretionary authority to vote on
such matter without discussion of such matter in the proxy statement for the
2001 Annual Meeting.
ANNUAL REPORT ON FORM 10-K
The Corporation will furnish to any shareholder or ESPP participant
upon written request, without charge, a copy of the Corporation's Annual Report
on Form 10-K, including the financial statements and schedules thereto, required
to be filed with the Securities and Exchange Commission. Requests for the
above information should be directed to: Stockholder Relations Department,
United Bancorporation of Alabama, Inc., P. O. Box 8, Atmore, Alabama 36504.
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APPENDIX A
1999 EMPLOYEE STOCK PURCHASE PLAN
OF
UNITED BANCORPORATION OF ALABAMA, INC.
1. PURPOSES OF THE PLAN
The purposes of the 1999 Employee Stock Purchase Plan (the "Plan") of UNITED
BANCORPORATION OF ALABAMA, INC., a Delaware corporation (the "Company"), are to:
(a) Encourage selected employees, upon whose efforts the Company is largely
dependent for its success, to improve operations and increase profits of the
Company; and
(b) Assist the Company in attracting and retaining employees of the Company or
its Affiliates; and
(c) Increase the interest of selected employees in the Company's welfare and
align the interests of such individuals with those of the stockholders of the
Company, by allowing participation in the growth in value of the common stock of
the Company (the Class A common stock, $.01 per share, of the Company being
referred to herein as the "Common Stock"); and
(d) Provide an opportunity for selected employees to purchase Common Stock on a
voluntary periodic basis.
It is intended that this plan constitute an "employee stock purchase plan"
within the meaning of Section 423 of the Internal Revenue Code of 1986, as
amended, and the regulations thereunder (the "Code").
2. ELIGIBLE PERSONS
All regular, full-time employees of the Company and of such Affiliates (as
defined below) as may be designated by the Board shall be eligible to
participate in the Plan, except that (i) there shall be excluded on a uniform
basis from each offering: (a) employees whose customary employment by the
Company or a designated Affiliate is twenty hours or less per week, (b)
employees whose customary employment by the Company or a designated Affiliate is
for not more than five months in any calendar year, (c) any employee who, as of
the first day of the Offer Period (as defined below), would own stock or hold
outstanding options to purchase stock, possessing in the aggregate (as
determined under Sections 423(b)(3) and 424(d) of the Code) 5% or more of the
total combined voting power or value of all classes of stock of the Company or
of any Affiliate and (d) any employee if the grant of an option hereunder would
permit his rights to purchase stock under this Plan (and under all other
employee stock purchase plans of the Company and its Affiliates under Section
423 of the Code, if any) to accrue (as determined under Section 423 of the Code)
at a rate which exceeds $25,000 of fair market value of such stock (determined
at the time such option is granted) for each calendar year in which such option
is outstanding at any time. In addition, there may be excluded on a uniform
basis from any offering, in the discretion of the Committee (as specified in
Section 11), employees who at the commencement of the Offer Period for any such
offering have been employed by the Company or a designated Affiliate for less
than two years, or such other, shorter period of time as the Committee shall
prescribe. The term "Affiliate" as used in this plan means a parent or
subsidiary corporation as defined in the applicable provisions (currently 424(e)
and (f), respectively) of the Code. The term "Offer Period" means the time
period of each offering under the Plan.
3. OFFERINGS UNDER THE PLAN
From time to time within the limits of the Plan, shares of Common Stock will be
made available for purchase only by employees through offerings thereof made on
behalf of the Company by its Board of Directors (the "Board") or the Committee
specified in Section 11. The Board or the Committee may from time to time
designate the Affiliates of the Company whose employees may participate in an
offering under the Plan (the Company's subsidiary, United Bank, being hereby
designated as such an Affiliate) and shall within the limits of the Plan fix the
terms and conditions of each offering, including the price per share and the
period of each offering (the "Offer Period"), which shall not exceed twelve
months but shall generally be of approximately two weeks duration. In particular
and without limitation, the initial offering under the Plan may be subject to
such conditions as may be deemed appropriate to satisfy the requirements of
Section 20. The Committee shall provide eligible employees notice of each
offering, and employees desiring to purchase shares of Common Stock in an
offering shall deliver to the Committee or its designee a Subscription Agreement
in such form as may be prescribed by the Committee.
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4. NUMBER OF SHARES PURCHASABLE
The number of shares that may be purchased by any employee under an offering,
which shall be not less than five shares, nor more than such number of whole
shares as may be purchased at the price specified by the Committee for such
offering for the lesser of (a) $1,500 or (b) an amount equal to five percent
(5%) of the annual basic or regular compensation of such employee in effect at
the commencement of the Offer Period for such offering, excluding overtime,
bonuses, incentive compensation and contributions made to any employee benefit
plan maintained by the Company or any Affiliate.
5. SHARES SUBJECT TO THE PLAN
The shares which may be offered under the Plan may be authorized and unissued
Common Stock or Common Stock reacquired by the Company and held in its treasury.
The aggregate number of shares of Common Stock which may be issued under the
Plan is Thirty-Five Thousand (35,000) except as such number may be increased or
decreased pursuant to Section 10. All shares offered under the Plan and for any
reason not purchased as well as all shares not previously offered will be
available for subsequent offerings.
6. PRICE
The price at which the shares may be purchased in any offering under the Plan
shall not be lower than 85% of the fair market value of the stock on the first
day of the Offer Period. As used herein "fair market value" shall be determined
as follows:
(a) If the Common Stock is listed on a securities exchange or is regularly
quoted by a recognized securities dealer, and selling prices are reported, its
fair market value shall be the closing price of such stock on the date the value
is to be determined, but if selling prices are not reported, its fair market
value shall be the mean between the high bid and low asked prices for such stock
on the date the value is to be determined (or if there are no quoted prices for
the date of grant, then for the last preceding business day on which there were
quoted prices).
(b) In the absence of an established market for the Common Stock, the fair
market value thereof shall be determined in good faith by the Committee, with
reference to the Company's net worth, prospective earning power, dividend paying
capacity, and other relevant factors, including the goodwill of the Company, the
economic outlook in the Company's industry, the Company's position in the
industry, the Company's management, and the values of stock of other
corporations in the same or a similar line of business, and may specifically
take into account information available to it as to recent transaction prices
for Common Stock.
7. RIGHTS ON TERMINATION OF EMPLOYMENT OR DEATH
Shares purchased under the Plan will be paid for in cash during the Offer Period
and within such time thereafter as may be specified by the Committee. If the
employment of any participant shall terminate prior to the end of the Offer
Period for any offering for any reason, including by retirement or death, no
purchase may be made under the Plan by such employee after such termination of
employment.
8. ISSUE OF SHARES
Shares purchased under the Plan shall be issued as soon as practicable after the
full payment in cash of the purchase price for shares subscribed for during the
Offer Period. No participant shall have any rights as a stockholder with respect
to any shares which they may purchase under the Plan prior to the date of
issuance to such participant of such shares.
9. ASSIGNABILITY
No assignment or transfer by an employee, former employee or their legal
representatives of any option, election to purchase shares, or any other
interest under this Plan will be recognized; any purported assignment or
transfer, whether voluntary or by operation of law, shall have the effect of
terminating such option, election to purchase or other interest. An employee's
option to purchase shall be exercisable only by such employee during such
employee's lifetime.
10. ADJUSTMENTS IN EVENT OF CHANGE IN COMMON STOCK
In the event of any change in the Common Stock by reason of any stock dividend,
recapitalization, reorganization, merger, consolidation, split-up, combination
or exchange of shares, or rights offering to purchase Common Stock at a price
substantially below fair market value, or of any similar change affecting the
Common Stock, the number and kind of shares which thereafter may be sold under
the Plan and the number and kind of shares which may be purchased under any
outstanding offering and the purchase price per share thereof shall be
appropriately adjusted consistent with such change in such manner as the
Committee, in its sole discretion, may deem equitable to prevent substantial
dilution or enlargement of the rights granted to, or available for, participants
in the Plan.
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11. ADMINISTRATION OF THE PLAN
The Plan shall be administered and interpreted by a Committee appointed by the
Board consisting of two or more persons who are "non-employee directors" as
defined in Rule 16b(3), none of whom shall be eligible to vote on or make any
decision affecting any rights they may be granted to purchase shares under the
Plan. The members of the Committee shall serve without compensation, but shall
be reimbursed for any reasonable expenses incurred in their capacities as
members. The Committee shall serve at the pleasure of the Board and may from
time to time adopt rules and regulations for the administration of the Plan. In
the absence of fraud or willful misconduct, no member of the Committee shall be
liable for any action or determination made with respect to the Plan. Any
interpretation, determination or other action made or taken by the Committee
shall be final, binding and conclusive.
12. APPLICATION OF FUNDS
The funds deposited with the Company pursuant to the terms of any offering and
the proceeds received by the Company from the sale of Common Stock under the
Plan will be used for general corporate purposes.
13. COMPLIANCE WITH GOVERNMENT LAW AND REGULATIONS
The Plan, each offering thereunder, and the obligation of the Company to sell
and deliver Common Stock thereunder shall be subject to all applicable Federal
and State laws, rules and regulations and to such approvals by any governmental
or regulatory agency as may be required. The Company shall not be required to
issue or deliver any certificates for shares of Common Stock prior to the
completion of any registration or qualification of such shares under any State
or Federal law, or any ruling or regulation of any government body which the
Company shall, in its sole discretion, determine to be necessary or advisable.
14. SALE OF SHARES PURCHASED UNDER THE PLAN
It is the hope of the Company that Common Stock purchased under the Plan will be
held for investment and not for resale; in furtherance thereof, the Company may
impose such limitations on the sale or other disposition of such Common Stock as
it deems appropriate. Nothing contained in the Plan shall restrict any employee
from selling any Common Stock purchased under the Plan at any time they choose
provided any such sale is consistent with any limitations imposed pursuant to
the preceding sentence. Each employee shall assume the risk of any market
fluctuations in the price of Common Stock purchased by such employee under the
Plan. Resales of shares within two years of the beginning date of the Offer
Period may be subject to provisions of the Code respecting disqualifying
dispositions during the required holding period under Section 423 of the Code.
15. COMPANY REPURCHASE RIGHTS
Upon the termination of employment for any reason of an employee who has
purchased shares of Common Stock pursuant to the Plan, whether by the Company,
with or without cause, or by the employee, the Company may elect, but is not
obligated to, repurchase all or any of such shares. If the Company exercises its
right to make such a repurchase, the Company shall within 30 days following such
termination notify the former employee in writing of the number of shares to be
purchased and the price per share, and shall repurchase the shares for cash
within ninety (90) days after the date of the notice. The repurchase price for
shares so repurchased shall be the fair market value of the shares as of the
date of termination, as determined by the Committee.
16. COMPANY'S PAYMENT OF EXPENSES RELATED TO THE PLAN
The Company will bear all expenses incurred in administering the Plan, including
expenses of issuing Common Stock under the Plan.
17. PLAN AND RIGHTS TO PURCHASE COMMON STOCK NOT TO CONFER RIGHT WITH
RESPECT TO
CONTINUANCE OF EMPLOYMENT
The Plan and any rights to purchase Common Stock granted under the Plan shall
not confer upon any employee any right with respect to continuance of employment
by the Company or any affiliate, nor shall they interfere in any way with the
right of the Company or any affiliate by which an employee is employed to
terminate their employment at any time.
18. PRORATION
If at any time shares of Common Stock reserved for the purposes of the Plan
remain available for purchase but not in sufficient number to satisfy all then
unfilled purchase requirements, the available shares shall be apportioned among
participants in proportion to their rights and the Plan shall terminate.
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19. AMENDMENT OR DISCONTINUANCE
The Board may amend, discontinue or terminate the Plan at any time, provided,
however, that no amendment, discontinuance or termination shall alter or impair
any rights outstanding at the time of such amendment, discontinuance or
termination to purchase shares pursuant to any offering hereunder. The Plan will
terminate in any event when all or substantially all of the shares reserved for
the purposes of the Plan have been issued.
20. EFFECTIVE DATE AND TERM OF THE PLAN
The Plan was adopted by the Board on November 9, 1999 and shall become effective
as of such date, provided no purchase rights granted under the Plan shall be
exercised, and no shares of Common Stock shall be issued hereunder, until (a)
the Plan shall have been approved by the stockholders of the Corporation and (b)
the Corporation shall have complied with all applicable requirements of the 1933
Act (including the registration of the shares of Common Stock issuable under the
Plan on a Form S-8 registration statement filed with the Securities and Exchange
Commission), and all other applicable requirements established by law or
regulation. In the event such stockholder approval is not obtained, or such
compliance is not effected, within twelve (12) months after the date on which
the Plan is adopted by the Board, the Plan shall terminate and have no further
force and effect and any Subscription Agreements made by participants during the
initial purchase period hereunder shall be void.
ADOPTED by the Board of Directors of UNITED BANCORPORATION OF ALABAMA, INC. on
November 9, 1999.
/s/ Charles E. Karrick
--------------------------------
Charles E. Karrick
Recording Secretary
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UNITED BANCORPORATION OF ALABAMA, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
The undersigned stockholder of United Bancorporation of Alabama, Inc.
(the "Corporation"), Atmore, Alabama, hereby constitutes and appoints L. Walter
Crim, H. Leon Esneul, William C. Grissett, Robert R. Jones, III, William J.
Justice, Bobby W. Sawyer, and David D. Swift and any of them, with full power of
substitution, proxies to vote the number of shares of Corporation common stock
that the undersigned is entitled to vote at the Annual Meeting of Stockholders
to be held at the corporate offices of United Bank, 200 East Nashville Avenue,
Atmore, Alabama, on May 3, 2000, at 3:00 p.m., local time, or at any
adjournments thereof (the "Meeting"), upon the proposals described in the Proxy
Statement and Notice of Annual Meeting of Stockholders, both dated April 10,
2000, receipt of which is hereby acknowledged, in the manner specified below.
PROPOSAL 1. Election as director to serve until the 2003 Annual Meeting of
Stockholders and until his successor is elected and qualified:
L. Walter Crim, H. Leon Esneul and William J. Justice
[ ] FOR all nominees listed (except as indicated below).
(To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided)
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[ ] VOTE WITHHELD from all nominees.
PROPOSAL 2. Approval of the 1999 Employee Stock Purchase Plan of United
Bancorporation of Alabama, Inc.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
In their sole discretion, the proxies are authorized to vote upon such other
business as may come properly before the Meeting or any adjournment thereof.
[ ] AUTHORIZED [ ] AUTHORITY WITHHELD
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR ELECTION OF THE ABOVE-NAMED NOMINEES AS DIRECTORS, FOR
PROPOSAL 2, AND WITH DISCRETIONARY AUTHORITY ON ALL OTHER MATTERS THAT MAY COME
PROPERLY BEFORE THE MEETING.
Please sign exactly as your name appears on your stock certificate and
date. Where shares are held jointly, each stockholder should sign. When signing
as executor, administrator, trustee, or guardian, please give full title as
such. If a corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
Dated: 2000
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Month Day Signature of Stockholder
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Signature of Other Stockholder
(If held jointly)
THIS PROXY IS SOLICITED ON BEHALF OF THE CORPORATION'S BOARD OF DIRECTORS AND
MAY BE REVOKED BY THE STOCKHOLDER(S) PRIOR TO ITS EXERCISE.